Section 56 of Indian Contract Act 1872: Agreement to Do Impossible Act
Section 56 deals with agreements that are impossible from the beginning, contracts that later become impossible or unlawful, and compensation where a promisor knew or ought reasonably to have known that performance was impossible or unlawful.
The Indian Contract Act, 1872 remains the governing central statute for this provision. Section 56 is commonly associated with the doctrine of frustration or supervening impossibility. The Supreme Court has repeatedly explained that the word "impossible" is not confined to literal or physical impossibility and that Section 56 is a rule of positive law.
Text and Meaning of Section 56
Initial impossibility: An agreement to do an act impossible in itself is void.
Subsequent impossibility or illegality: A contract to do an act which, after the contract is made, becomes impossible, or becomes unlawful because of an event which the promisor could not prevent, becomes void when the act becomes impossible or unlawful.
Compensation: If a person promises to do something which that person knew, or with reasonable diligence might have known, to be impossible or unlawful, while the promisee did not know it, the promisor must compensate the promisee for loss caused by non-performance.
For the authoritative statutory text, see the Indian Contract Act, 1872 on India Code.
Three Parts of Section 56
| Part | Rule | Effect |
|---|---|---|
| Impossibility from the outset | The promised act is impossible in itself when the agreement is made. | The agreement is void. |
| Supervening impossibility or illegality | A valid contract later becomes impossible or unlawful due to an event the promisor could not prevent. | The contract becomes void when performance becomes impossible or unlawful. |
| Known impossibility or illegality | The promisor knew, or with reasonable diligence could have known, of the impossibility or illegality, but the promisee did not. | The promisor must compensate the promisee for resulting loss. |
Doctrine of Frustration under Section 56
The doctrine of frustration applies when an unforeseen supervening event fundamentally affects performance so that the contractual obligation can no longer be performed in the manner contemplated by law. Mere inconvenience, increased expense, commercial difficulty or a less profitable bargain does not automatically frustrate a contract.
Satyabrata Ghose principle
The Supreme Court has held that Section 56 embodies a rule of positive law and that "impossible" must be understood in a practical, rather than merely literal, sense. A later Supreme Court judgment reproducing and applying this principle is available on the official Supreme Court website.
Section 32 and Section 56: Force Majeure
The distinction between Sections 32 and 56 is important. Where the contract itself contains an express or implied term dealing with the consequences of a specified uncertain event, the matter is ordinarily governed by the contractual term and Section 32 relating to contingent contracts. Where the supervening event falls outside such a contractual allocation of risk and makes performance impossible or unlawful, Section 56 may become relevant.
The Supreme Court has reiterated, while discussing Energy Watchdog v. Central Electricity Regulatory Commission, that contractual force majeure provisions are generally dealt with under Section 32, while frustration outside the contract is considered under Section 56. See the official Supreme Court judgment.
When Section 56 May Apply
- Performance becomes legally prohibited after the contract is made.
- The essential subject matter necessary for performance ceases to exist.
- A fundamental event destroys the basis on which the parties contracted, making performance practically impossible in the legal sense.
- Performance depends on circumstances that later become impossible without fault of the party relying on Section 56.
When Section 56 Normally Does Not Apply
- Performance has merely become more expensive or commercially burdensome.
- The alleged impossibility is self-induced or results from the party's own choice or default.
- The contract has already allocated the relevant risk through a force majeure or similar clause, in which case the contractual clause must first be examined.
- Performance remains substantially possible even though circumstances have changed.
Illustrations to Section 56
The statutory illustrations explain the provision through examples involving an agreement to discover treasure by magic, a marriage contract affected by subsequent incapacity, a promise made despite an existing legal impediment to marriage, a foreign-port contract affected by a later declaration of war, and a theatre engagement affected by illness on particular occasions. These examples demonstrate initial impossibility, later impossibility or illegality, and compensation where the promisor possessed relevant knowledge.
Effect of a Contract Becoming Void
Section 56 determines when the contract becomes void because of impossibility or illegality. Consequential questions, including restoration of advantages received under a contract that later becomes void, may also require consideration of other provisions of the Indian Contract Act, including Section 65, depending on the facts.
Practical Checklist
- Identify the exact contractual obligation alleged to have become impossible or unlawful.
- Check whether the contract contains a force majeure, contingency, change-in-law or risk-allocation clause.
- Determine whether the event occurred after formation of the contract.
- Examine whether the event was beyond the control of the party invoking it.
- Assess whether performance is truly impossible in the legal sense or merely more difficult or expensive.
- Consider whether the alleged frustration was self-induced.
- Examine restitution or compensation consequences under the Contract Act.
Judgments can be searched through the Supreme Court Reports search portal. The statutory text should be checked against the current India Code publication before relying on it in pleadings or legal advice.
This article provides general legal information. Application of Section 56 depends on the terms of the contract and the facts of each case.